Indonesia’s rupiah fell by the most in a week on speculation year-end dollar demand from importers is exceeding supply after the nation’s trade deficit widened.
Southeast Asia’s largest economy recorded a $1.5 billion trade shortfall in October, the biggest since at least 2008, official data show. That may widen the fourth-quarter current-account shortfall to 2.3 percent of gross domestic product, which would be the most in Bank Indonesia data going back to 1997, according to the monetary authority. A report on exports and imports in November is due on Jan. 2.
“The rupiah’s weakening is still driven by last-minute dollar demand from importers before the end of the year,” said Bayu Kurniawan, a Jakarta-based foreign-exchange trader at PT Bank Ekonomi Raharja, a unit of HSBC Holdings Plc. “The trade balance will gradually head toward a surplus, though it may record another deficit in November.”
The rupiah declined 0.1 percent to 9,666 per dollar as of 3:55 p.m. in Jakarta, the most since Dec. 17, according to prices from local banks compiled by Bloomberg. It has weakened 6.2 percent this year, poised for its biggest loss since 2008. The rupiah is the worst-performer among Asia’s 11 most-traded currencies after the Japanese yen.
One-month implied volatility, a measure of expected moves in exchange rates used to price options, was steady at 5.7 percent, compared with 13.2 percent at the end of 2011.
The yield on the government’s 7 percent bonds due May 2022 was dropped one basis point, or 0.01 percentage point, to 5.19 percent, prices from the Inter Dealer Market Association show. The yield fell 84 basis points this year.